India's Index of Core Industries (ICI) growth moderated to five point four per cent in July from six per cent in June, DPIIT data showed. The June print was revised up to six per cent from a provisional five per cent and core sector output had grown three point two per cent in July last year.

Five of the nine core industries recorded slower growth, with iron ore declining to 29.5 per cent from 44.5 per cent in June. ICRA chief economist Aditi Nayar said an unfavourable base meant the iron ore swing alone cut the ICI print by 95 basis points and noted that iron ore output is highly volatile.

Electricity generation slowed to nine per cent in July from 11.4 per cent in June, while steel production fell to two point nine per cent, the lowest in the new series. India Ratings and Research chief economist Devendra Pant said the slowdown in electricity generation was possibly due to reduced demand as temperatures eased after peak summer.

Fertiliser output contracted eight per cent in July after a three point three per cent fall in June, which analysts linked to disruptions from the West Asia conflict. Crude oil output contracted by five point three per cent and natural gas output fell three point seven per cent; together with iron ore, electricity and steel these five sectors account for nearly 64 per cent of the ICI.

Coal output rose to seven point six per cent and cement production strengthened to 13.1 per cent, pointing to healthy construction activity. Refinery products grew two point seven per cent in July, the first positive reading in four months, and core sector growth for April to July stood at four point three per cent compared with one point five per cent a year earlier under the revised 2022–23 base.